Leasing Its Perceived Black Eye

Is It Justified?

It's ironic that leasing for some has negative characteristics associated with it, when in reality it's probably the most useful tool we have to maintain a vehicle for our personal use. We have listed three reasons we think it gets a bad reputation from those not familiar with the benefits.

Non-Ownership - It's possible there is a perceived comfort level with buying that does not exist with this alternative to ownership.  After all, we and our parents before us, have always bought cars and its familiar; however that comfort or familiarity comes at a price.  With ownership you experience a brisk depreciation of your asset and must you engage in the process of selling the vehicle when it has completed its service.  Selling is not always an easy task in Israel.

Ask yourself what you are trying to achieve.  Do you want to own another asset, or do you want to make use of an asset in the most economical way possible?  Before you answer that question consider this: no one really buys a car.  They really buy its use, which is why as soon as its usefulness is diminished they sell it.

No Equity Build-up: This is a big misconception to which we devote a full page.  It's called "The Elephant in the Room and No One is Talking About It" it should clear some of the reservations people usually voice about equity positions.

Common Misuse of Leasing:  Initially designed by car manufacturers to move an ever price-increasing inventory, pop culture morphed the affordability aspect into a means to enhance their perceived net worth, to look more affluent.

It was now possible for a consumer who could normally only afford a Toyota to drive a Lexus, or if they had a Nissan Maxima level salary they now could now drive an entry level Infinity.  We call this "plastic fantastic" because it's all about the show, but it's not the same here in Israel.

In Israel we live within a more reality-based existence, we don't experience the same "keeping up with the Jones/Cohen's" phenomenon that we did in the west.  Here it is more a function of protection of assets than that of embellishment of financial or social stature.

For Anglo's our income generation here in Israel is not at the same level as it was in the west and our cost of living is more.  Leasing gives us the ability to pay only for the use of the car and protect our cash reserves.  Down payments are less as are the monthly payments.  Since only new or 1-3 year old pre-owned cars are eligible we experience less or no repair costs, enjoy better fuel consumption and best of all the depreciation that all cars experience are no longer factors.  Back to Leasing page.